Tag Archives: Business-IT Maturity Model

ITIL and the Business Relationship Manager: Avoiding the Performance Trap!


order-taker

I have good news, and I have bad news!

The Good News…

The IT Infrastructure Library (ITIL) 2011 edition and the ISO/IEC 20000 standard for IT Service Management formalized the existence of the Business Relationship Manager (BRM) role and corresponding Business Relationship Management process as a new best practice and international IT Service Management standard requirement.  This is good – for professional BRMs around the world, for the IT profession in general, and for improving the business return on IT investments, as technology becomes ever more deeply embedded in business processes.

The Bad News…

(And I know I will get hate mail and lose readership for saying this, but…) As defined by ITIL, the BRM role comes off as somewhat tactical – not something to get business leaders salivating over their new partnership with IT, nor hungry to innovate business products and services!  Let me be clear – the ITIL vision of BRM is necessary – but from my experience, it is insufficient to drive real business value beyond a certain point.  It will help an IT organization with poor service quality get better.  But it will not help an IT organization with good service quality to excite and delight their customers with the new business capabilities that are enabled by information and information technology!

Business Relationship Manager Role

I’ve posted extensively on this role in the past – the BRM is a bridge between the IT organization and its business clients (just as a good CIO is a bridge between the IT organization and corporate leadership).  As such, it both represents the business clients to IT, and IT to the business clients.  This role has surfaced over the last 10 years or so and Gartner predicts that the fraction of IT personnel dedicated to Relationship Management and Change Leadership functions will reach as much as 15% by the end of 2013 and grow up to 20% by 2016.  LinkedIn hosts two groups dedicated to the BRM role.  One group – IT Business Relationship Management - currently boasts over 1,800 members.  The other group, Professional Business Relationship Managers currently has over 2,600 members!  (In the interests of full disclosure, I co-manage the latter group.)

I’ve conducted a significant amount of consulting, assessment and training in the BRM space, including designing and leading BRM training and development programs for global companies with over 100 BRMs (as well as for those with fewer than 5 BRMs).  From that experience, and from my ongoing activity on the LinkedIn groups, I’ve seen two distinct ‘flavors’ of BRM – “Tactical” and “Strategic.”

BRM and Business-IT Maturity

To help understand “tactical” and “strategic” BRMs and how they’ve come to be, I’ll use my Business-IT Maturity Model (BITMM).  I’ve posted at length about the BITMM.  In its simplest form (see graphic below) the model represents both business demand maturity (highlighted in red to the left of the learning curve) and IT supply maturity (highlighted in blue to the right of the curve. These never move completely in tandem – sometimes demand is slightly ahead of supply, other times it is slightly behind.  If demand and supply get too far out of whack, there’s usually a change of CIO (or a turnover of the IT organization to an outsourcer!)

Slide1

The number of maturity levels is arbritary, but for simplicity let’s use three – business efficiency, business effectiveness and business transformation.  Where a company is at any point in time is a function of factors such as:

  • the industry it’s in
  • current business leadership
  • competitive and regulatory forces
  • quality of IT leadership
  • quality of service delivery

For example, the financial services industry tends to be highly information-intense, so is generally demonstrated higher business demand and IT supply maturity than say, manufacturing companies, which have traditionally been less dependent on information.  All that is changing, of course, as businesses and governments everywhere become increasingly digitized.

The ITIL Connection

Improving service delivery quality is where ITIL focuses.  According to its current owners (The APM Group Limited) ITIL is “the most widely accepted approach to IT service management in the world.”  Originally developed under the auspices of the UK Office of Government Commerce (OGC), ITIL is becoming a popular approach to service management.  Often loosely, and occasionally rigorously followed, ITIL documents processes and practices for service management.  This focus on service management is crucially important in moving IT supply maturity up from low Level 1 to mid-Level 2.

The Tactical BRM

The graphic below crudely cuts the BITMM in half.  The lower half is what I refer to as the “tactical” BRM space – focused on business efficiency and effectiveness.  The conceptual dividing line between these spaces is important.  Around the mid-point of Level 2 maturity, the learning curve changes direction.  This is also a common “sticking point” (see my earlier posts on “sticking points”) where IT organizations often become trapped and their efforts at performance improvement taper off.  In some cases, they actually fall back in performance.

Slide2

So, in the pursuit of service management quality, the BRM has an important role, establishing a strong business relationship with the customer by understanding their business and customer outcomes.   But the focus is service management, as opposed to the strategic possibilities for IT capability to enable new or improved business products and services.  Service management applies most to ‘steady state’ IT services – not to transformational projects and programs on behalf of business units.

The Strategic BRM

The upper half of the BITMM is the “strategic” BRM space – focused on business effectiveness and transformation.  While an IT organization must be careful not to slip back on IT service quality and customer satisfaction, simply delivering ever-improving services will not transform IT into a respected, value-producing business partner. Sooner or later, IT service management efforts reach a point of diminishing returns. Something quite different is then needed to further improve the business return on IT assets and investments.  While the “Tactial BRM” tends to focus on IT supply management processes and activities, the “Strategic BRM” focuses on business demand management – stimulating, surfacing and shaping demand for services, activities and initiatives with the highest potential business value.  The “Strategic BRM” works closely with her business partner to ensure that IT investments and capabilities yield real business value.

Leverage the Standard Frameworks – But Don’t Get Stuck

The message here is that it’s ok to leverage standards and frameworks such as ITIL, COBIT and TOGAF – but essential to do so with intelligence!  They have their place – and a context for which they were intended – that often being UK government entities.  Nothing wrong with that, but it tends to be a context of control – not innovation.  Control can help you get from low Level 1 to mid-Level 2 – but not to Level 3.  What kind of IT capability does your business need – controlling or innovating?

Thoughts on a postcard, please!

Graphic courtesy of giffconstable.com

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Is IT Organizational Confusion Exacerbated by the Role of Business Relationship Manager?


I received a question from a reader about the role of a Business Relationship Manager (BRM).  I decided to bring the question and my response to this blog.

His question, and the context for it was:

When the BRM role was introduced at our organization, the Head of IT did not convey a clear vision or direction for how the new role would fit into the existing IT organization structure.  We did not have clarity on how to deal with the issues that are brought to surface by the BRM, or how the BRM should work with Business Analysts, Project Managers and other key roles.  Please share practical examples of how a typical BRM should operate on a day-to-day basis.  What impact should a BRM expect to have made in 3, 6, 12 months and who should see/feel the impact- is it for the IT department and its behavior or how business begins to engage with BRM?”

His email went on to say:

I feel that a lack of clarity and appropriate structure and governance of how a BRM is to operate within an existing IT organizational structure will result in a muddle and confusion for IT colleagues and ultimately fractured relations with the business/customers.”

New Organizational Roles Disrupt the Status Quo

My first observation is that you could substitute any major new role for the specific BRM issue above and have the same potential for organizational confusion.  I’ve seen this with the introduction of Business and IT architects, Program Managers, Service Managers, Product Managers, and so on.  Sometimes the new role gets introduced with limited clarity as to its purpose – rather it feels like “the thing to do”.  Often, the catalyst for the new role is something like:

  • Someone in an influential position has read about or came from an organization where this role reputedly worked miracles – “We should try this here!”
  • There are recurring pain points (e.g., a ‘noisy’ or dissatisfied business customer) – “Let’s put Jill into a role to face off with this customer and see if she can reduce the noise!”
  • Something doesn’t feel right about the current organization structure – “Let’s introduce a new role and see if that improves things!”  This is akin to the proverbial moving of deck chairs aboard the Titanic!

Implications of New Roles

Whatever the catalyst, there are a couple of important contextual characteristics to note here:

  1. Lack of clarity about the rationale for the new role – what problem(s) are we trying to solve and how will the new role solve them?
  2. Unclear expectations about what the outcomes of the new role should be (for example, picking up my readers question, “impact to have made in 3, 6, 12 months and who should see/feel the impact?”)
  3. Failure to fully consider changes that must be made to the IT operating model.  Presumably, the new role is taking over some Responsibility and/or Accountability from other roles, and that other roles need to be Consulted or Informed by the new role.  Note, the initials I’ve capitalized – RACI – the (hopefully) familiar tool for clarifying and assigning roles and responsibilities.

Unclear New Role + Unclear IT Operating Model = Total Confusion!

So, what we have here is a new role being introduced with a lack of clarity as to why, or how, into an organization that already has an unclear Operating Model.  In the past, we somehow managed to ‘get by’ with the unclear Operating Model because:

  1. We have bright, hard-working people who work at ‘smoothing out the bumps’ caused by lack of Operating Model clarity.
  2. They’ve been at this for a while, so unless there’s an unusual disruption to the status quo (such as a new role being introduced), we manage to limp along ok.

Answering the Tough Questions

My reader asked for “practical examples of how a typical BRM should operate on a day-to-day basis.”  With due respect to my reader, it’s the wrong question.  You can’t solve the problem by defining how a BRM operates.  The real question is, “How should the IT organization operate on a day-to-day basis with the introduction of this new role (the BRM)?” i.e., “What is our next-state IT Operating Model?”  I’ve posted many times on the components of an IT operating model, how to define one, how to implement one, and so on.  Enter IT Operating Model in the search box at the top – you’ll get about 40 posts on this topic representing 30 years of IT management consulting wisdom shared over 5 years of blogging!

My reader also asked, “What impact should a BRM expect to have made in 3, 6, 12 months and who should see/feel the impact- is it for the IT department and its behavior or how business begins to engage with BRM?”  The first part of this is totally dependent upon the organizational context – and especially on business and IT maturity.  But it is the right question, and the BRM should be working with the IT leadership team defining the hoped-for impact and how to track it.

It is also important to consider possible unintended consequences of a new role’s introduction.  For example, I worked with a global multi-billion dollar company who carefully introduced the BRM role.  They picked their “best and brightest” to fill the BRM position, and we developed a robust training program and toolkit for the BRMs.  Unfortunately, they were so effective at surfacing, stimulating and shaping business demand for IT, that they quickly exceeded supply capacity.  The BRM’s found themselves saying “no” to the same business executives they’d worked with to surface that demand.  If the expression “getting egg on your face” has any meaning, this was getting an entire chicken farm all over yourself, with lashings of excreted waste!

To the second part – who should see/feel the impact – I’d say that if there’s no positive impact to the business customer, then why bother with the BRM (or any new) role?  And inevitably, the IT department will feel impact – disruption initially, but over time, greater efficiency (“doing things right”) and effectiveness (“doing the right things”).

So, What To Do?

Again, this is a topic I’ve visited many times over the years on this blog – click on Organizational Change Management on the tag cloud to the right of this post for a collection of posts that more or less deal with this issue.

There’s no easy formula here – it’s about motivating change.  This is highly contingent on organizational context, relationships, and other factors specific to a given environment, but there are some common elements:

  1. Find ways to surface the pain of the status quo to those with the organizational power and authority to initiate the change – what the quality movement calls “the cost of quality”.  Use the process of surfacing this pain to build a guiding coalition of stakeholders who want and will benefit from the change.
  2. Find ways to clarify and sharpen the vision of the future state – the remedy to the pain of the status quo.  How will the introduction of a BRM role improve things?  What will this look like – after 3, 6, 12 months?  What will the implications be for our IT operating model?  Again, leverage the coalition – get their input and ensure their buy-in to the future state.  Help them understand what they must do to help the change happen and the future state become real.
  3. Find ways to clarify the transition from the status quo to the future state – what’s the transition plan?  Should we start with one BRM and conduct a pilot?  Should we pull together an “IT Operating Model Improvement Team” to do a fast cycle (no more than 60 days) analysis and provide recommendations to the IT leadership team?

Image courtesy of Awakening Business Solutions

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Why Some Projects Should Be “Led,” Not “Managed”


I’ve posted before (many times!) about Business-IT Maturity, and the common “sticking points” that most IT organizations run into around the mid-point between low and high maturity.  (See, for example, here, here, and here, or enter “Sticking Point” into the search box.)

Walking Ever Faster Will Not Get You Running!

If, arbitrarily, you pick 3 levels of Business-IT Maturity – say Level 1 = low, Level 2 = medium and Level 3 = high, you will typically find that the things you have to do to get from Level 1 to Level 2 not only won’t get you from Level 2 to Level 3 – they will actually prevent you from reaching Level 3!  The trick is to recognize what these things are, and that you are entering a very different learning curve.  For example, if your solutions delivery process is broken, you need a great deal of rigor and discipline – in the form of Project Management and a Systems Development Life Cycle.  That will get you from “chaotic” (Level 1 in my hypothetical 3-Level scale) to “managed” (mid-Level 2).  But over time you will find the limitations of a “managed” approach to solutions delivery – especially when you need to implement “fuzzier” solutions, such as social media, or business analytics.

One Size Does Not Fit All

With solutions delivery, one-size does not fit all, and the methodology that works well for a relatively easily pre-specified transaction processing system (order-to-cash, for example) will not work well for something that is less predictable and more emergent.  Hanging in there with the “official” methodology (for fear of reverting to the chaotic situation that persuaded you to implement the methodology in the first place!) will frustrate the developers, annoy the business client, and will probably lead to a poor or unworkable solution – which will upset everybody!  What is needed is a finer-grained way of categorizing types of business solutions, and flexibility with methodologies to fit the best approach for a given solution type.

What Worked for Transactional Systems Won’t Work for Innovation Solutions

Collaboration and Knowledge Management initiatives are not readily planned using traditional project management methods – they tend to follow an ‘emergent’ pattern that is typically non-linear and somewhat unpredictable.   A traditional planning style, with detailed deliverables, work steps, activities and due-by dates must give way to a more iterative and organic approach.

Social Media Projects Should be Led

You cannot mandate participation in a community – you can invite participation and create reasons to do so. You cannot schedule a date by which a given percentage of a community will be collaborating on a wiki, for example – you can only set expectations, model desired behaviors, and create good reasons for people to become active users of the wiki.  Then you must reevaluate the results and adjust the approach in the light of experience.

Recognizing the Hard-Won Battle – and the Need to Fight New Battles

It seems that sometimes the battle of getting from Level 1 to Level 2 Business-IT Maturity is so hard won, and the win so apparently fragile, that leaders hang on to the methods that got them to Level 2.  This is about being really good at solving yesterday’s problems.  It’s a different world today, and the ways that technology and information can be exploited for business advantage demand different approaches.  Don’t let the trappings of Level 2 restrict your ability to get to the next level!

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COBIT – Good News… Bad News!


COBIT is described by its creators, ISACA, as a “Framework for IT Governance and Control.”  Celebrating it’s 15-year anniversary, COBIT provides an excellent framework for helping bring IT under control.  In ISACA’s own words:

COBIT is an IT governance framework and supporting toolset that allows managers to bridge the gap between control requirements, technical issues and business risks. COBIT enables clear policy development and good practice for IT control throughout organizations. COBIT emphasizes regulatory compliance, helps organizations to increase the value attained from IT, enables alignment and simplifies implementation of the COBIT framework.”

With Version 5 being released this year, COBIT 5 will consolidate and integrate IT value delivery and IT risk management into the COBIT 4.1 framework.

So, You Want to Increase IT Maturity?

For IT shops of relatively low maturity, COBIT provides an effective framework and body of intellectual capital for implementing or improving IT processes and controls.  It can help avoid a great deal of ‘reinventing the wheel’ that so many IT shops get into, developing IT processes from scratch, or living with processes that do not integrate properly and propagate IT organizational silos.  The danger here, though, is that simply licensing a set of process descriptions is by no means equivalent to adopting them.  If people don’t really understand the processes they are supposed to be following, or if they aren’t completely bought into the need for and value of those processes, then having scads of process descriptions and related documents is not going to ensure a controlled IT environment.

Oh, You Want to Reach High IT Maturity?

I have blogged at length about Business-IT Maturity and have described a simple 3-stage model of both Business Demand Maturity – the business ‘appetite’ for IT, if you will, and IT Supply Maturity – the necessary IT capabilities to satisfy business demand (at lower maturity) and to shape and stimulate business demand (to reach higher maturity).  I’ve also written several posts on what I refer to as ‘sticking points‘ or traps that IT organizations fall into when they are in the middle levels of business-IT maturity. (I’m reminded of the proverbial ‘gumption traps‘ that Robert Pirsig so eloquently describes in his exploration of the metaphysics of quality, Zen and the Art of Motorcycle Maintenance.)

Unfortunately, I’ve found that COBIT can easily create one such trap.  While it can be an effective way to get from Level 1 to Level 2 maturity (on the 3-stage model), it will not take you from Level 2 to Level 3, and can, in fact, inhibit movement towards high business-IT maturity.

Let me try an analogy.  Imagine a car driver who is taught how to drive around a city and diligently follow all the rules and regulations of the road, including speed limits.  Then put that driver into a racing car and expect them to keep up with other racing car drivers on a race track.  Not only will they be unable to keep up, they will likely wreck the car and hurt themselves, unaccustomed as they are to the finer points of fast driving, and unskilled in high speed steering techniques.  Note, the racing car driver is still perfectly able to drive in the city and be compliant with the rules of the road, she has learned additional skills to win races and avoid high speed crashes.  Our novice, city-trained driver has not learned these skills.

This is the COBIT trap – it will take you so far, but, absent further skills and enhanced processes, will not take you further.

I’m expecting this post to be controversial, and the COBIT bigots to attack my heresy, so please, bring it on!

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Do You Have IT Organizational Clarity – Part 3


This picks up on Part 1 and Part 2 in this series on IT Organizational Clarity.

In Part 1, I discussed the importance of IT Organizational Clarity, the symptoms when clarity is compromised, and the challenges of trying to address those symptoms rather than the root causes that lead to compromised clarity.  Part 1 closed with a discussion of the two key dimensions along which IT Organizational Clarity can be tackled – scope (units of IT Capability) and meaningful and assessable characteristics for evaluating and improving IT Capabilities.

In Part 2, I discussed ways to define IT Capabilities and provided guidelines on the manageable number of IT Capabilities and appropriate depth of decomposition.  In this post, I will describe three different types of IT Capability.

Not All IT Capabilities Are Born Equal

It is helpful to classify IT Capabilities into one of three different types, as illustrated in the graphic above.

Value Chain Capabilities

At the core are those capabilities that take inputs, add value, and deliver outputs to a customer or end consumer (in the world of IT, these tend to be services and products).  Think of these Value Chain Capabilities as those that the end customer appreciates (hopefully!) and is willing to pay money for.

For example, as a business user, I may have a business problem I’d like IT help to solve.  That problem (or opportunity) is the input to a Value Chain.  The first Capability that will approach that problem adds value by analyzing the problem, identifying and proposing a solution.  As the business user, I appreciate that value has been added – drilling into my stated problem and offering (and perhaps demonstrating via a prototype) one or more proposed solutions.  The next Capability in the Value Chain might take the chosen solution and develop and deploy that solution.  Again, as the business user, value has been clearly added – taking a proposed solution and delivering it.  The final Capability where value can be added is supporting and maintaining that solution – again, a recognizable way of adding value for me, the customer.

Ultimately, as the business user or consumer, these are the only Capabilities I care about and am willing to pay for (directly or indirectly) because of the value they add for me.  Unfortunately, while these Value Chain Capabilities are necessary, they are not sufficient.

Enabling Capabilities

Value Chain Capabilities typically draw upon other Capabilities that enable them.  Think of these as Shared Services that are common to other Capabilities, or to other instances of problems/solutions working their way through the Value Chain.  Examples of IT Services that might enable the Value Chain Capabilities include Project Management, IT Operations, and IT Supply.

Alignment and Governance Capabilities

Value Chain Capabilities also typically depend upon other Capabilities that ensure that the work they are doing is aligned and governed to ensure they are operating effectively and in the interests of the enterprise.  For example, determining which business problems will be addressed, which solutions will be selected, how staff and resources will be allocated are all important control that Value Chain Capabilities will be subject to.

Why These Distinctions Matter to IT Organizational Clarity

The distinctions between Value Chain, Enabling and Alignment/Governance Capabilities are significant:

  1. Different types of IT Capability tend to be optimized towards different value propositions, with implications for how they are organized.  For example, Enabling Capabilities tend to be optimized for Operational Excellence (as shared services, they need to deliver predictable, consistent, quality services at the lowest possible cost).  Value Chain Capabilities tend to be organized for Customer Intimacy, delivering what specific customers want; anticipating customer needs.  Alignment and Governance Capabilities tend to be more about decision-making – rather than delivering services, they make decisions or provide decision-making frameworks – think Enterprise Architecture and the mechanisms and structures that support it as Alignment and Governance Capabilities.  As such, these tend to be networked, linking stakeholders and decision makers, and optimized to maximize the business value delivered or enabled by IT Investments..
  2. Some types of IT Capability lend themselves to alternate sourcing more than others.  For example, Aligning and Governance Capabilities lend themselves the least to straight outsourcing approaches (do you want to pass decision rights to an external vendor?)
  3. Different types of IT Capability lend themselves to different funding models.  For example, Value Chain Capabilities lend themselves to direct business funding, whereas Enabling Capabilities lend themselves better to indirect funding models (e.g., overhead charge).

IT Capability Model Example

As an illustration, below is a ‘normative’ IT Capability Model.

The Fractal Nature of IT Capabilities

Note, that as you decompose any IT Capability, you will generally find that the decompositions will have a similar structure – a primary Value Chain, drawing upon underlying Enabling Capabilities and influenced by Alignment and Governance Capabilities.

For example, Manage Business-IT Portfolio & Programs might decompose into the following sub-Capabilities:

In the following post, we will look at the assessable characteristics of any IT Capability as a means of determining Capability Maturity and determining how to increase maturity and thereby improve performance.

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Do You Have IT Organizational Clarity – Part 2


My previous post introduced the topic of IT Organizational Clarity, discussed common symptoms arising from a lack of Organizational Clarity, and suggested two dimensions through which clarity can be assessed and improved:

  1. Bounding scope by defining “IT Capabilities” at an appropriate level of granularity. (Units of analysis).
  2. Defining meaningful and assessable characteristics for IT Capabilities. (Means of assessing and improving).

Note – the ultimate gauge of IT Organizational Clarity is in the ‘health’ of the IT Organization and the business results to which it contributes.  However, there are all sorts of demand-side complexities in assessing these things, so for now I will focus on the notion of capability maturity as a worthy proxy for and predictor of end results and the ability to continuously improve.

In this and the next couple of posts I will discuss the notion of IT Capabilities and how best to define them.  I will then address the assessable characteristics of IT Capabilities.

What Is an IT Capability?

In order to adequately define an IT Capability, we need to clarify a couple of common terms – Service and Process:

Service

A Service in the context of IT Capabilities is best described as the interface point between a provider and a consumer where value is exchanged.  Services should be defined from the perspective of the consumer.  They need to be ‘discoverable’ and the service interface understood by the consumer.  They need to have clarity on what they do, what they cost, how they are invoked, and how problems are reported and resolved.  The service provider should have a good understanding of the value received by the consumer, as well as the overall quality of the customer experience.  This may comprise both tangible and intangible elements, most of which are ultimately subjective.

Process

A Process is a sequence of interdependent and linked procedures which, at every stage, consume one or more resources (employee time, energy, money) to convert inputs (data, material, etc.) into outputs.  These outputs often serve as inputs for the next stage until a known goal or outcome is reached.

Capability

A Capability can be thought of as everything it takes behind the scenes that makes a service possible.  This will include:

  • One or more Processes.
  • Descriptions of the Roles needed to perform one or more of the procedures within a process (e.g., Project Manager, Business Analyst, Relationship Manager).
  • Descriptions of the Competencies needed to perform a given role (what the person performing the role needs to know, e.g., business knowledge, what skills they need, e.g., facilitation, and what behaviors they should exhibit, e.g., results orientation).
  • An adequate supply of competent human resources filling the given roles.
  • Tools and technologies needed to automate or execute necessary processes or procedures.
  • Management systems necessary to ensure the health and performance of the Capability, including funding, organizational will, personal incentives, and so on.

How Many IT Capabilities Should You Have?

This is a tricky question to answer.  First, of course it depends on the mission to be served by a given capability.  But more importantly, this is a question of granularity.  In the heady days of business process re-engineering, I learned that picking the right granularity for an end-to-end process is crucial, and perhaps as much art as science.

I think this question has more to do with the characteristics of and limitations to the workings of the human mind than anything else.  If you end up with, say, 3 IT capabilities, chances are that you are at too high a level of granularity to be really useful in terms of analytical and management discipline.  On the other hand, if you have 12 or more IT capabilities, you are at too low a level.  From my experience, between 7 and 9 is the right number of IT Capabilities to have in a ‘top-level’ IT Capability model.

How Many Levels of Decomposition Should You Go To?

Yes – you guessed it – it depends!  On the basis that you really don’t understand a Capability unless you can see a level of decomposition below it, I think the answer is at least two levels of decomposition are necessary.  Beyond that, it depends on the Capability you are trying to understand or improve.  Consider, for example, the Process aspect of an IT Capability.  Capabilities that are highly procedural, such as those found in IT Infrastructure and Operations, will typically need more levels of decomposition (i.e., more detailed process definitions).  Coincidentally, this is the domain of ITILv3, so you can effectively ‘buy’ process definitions and a process architecture off-the-shelf.

On the other hand, a Capability such as Opportunity Discovery may be more about analytical skills and the magical space between problem understanding and solution definition.  This space is much more about specially-skilled people and specific business domain knowledge rather than sequential, detailed and rigorously controlled processes (as in Statistical Process Control.)

We will pick this up in the next post and look at three different types of IT Capability  – Value Chain Capabilities, Aligning/Governing Capabilities and Enabling Capabilities – and examine the distinctions between these and why the distinctions are important.

Graphic courtesy of MassBay Organization Development Learning Blog

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Account Teams and Business-IT Relationship Management


I’ve posted quite frequently on this blog about the role of the Business-IT Relationship Manager. It’s a key role – crucial, in fact, at mid-levels of Business-IT maturity.  It’s a role that typically does not work well at lower maturity, yet is essential to reaching higher maturity. It’s also a role that is hard to get right!  But went you get it right, it can contribute significantly to business value realization from IT assets and investments.

An Account Teaming Approach to Relationship Management

I’ve found myself re-immersed in the Relationship Management (RM) domain lately.  I’m working on a significant RM development program with one current client, and helping another client fine tune their IT Operating Model.

With the first client, I got involved in a benchmarking exercise, going back to two former clients where I had led extensive RM training a few years back.  The purpose of the benchmarking was to find out how their RM approach had evolved, what was working well, and where they still had challenges.  In both cases, the clients had converged on an Account Management Teaming approach – essentially, a set of business unit-facing account teams comprising a very senior Relationship Manager (rarely called that, by the way), a Solutions Manager and an Enterprise Architect.

In the client where we are fine tuning the IT Operating Model, one such account team had formed fairly naturally.  Nobody told them to organize that way.  One of the RM’s met with a business architect and a solution manager and decided they needed to set time aside to meet and talk and strategize in order to present a cleaner, simpler face to the business client.  They wanted to be more deliberate and proactive in shaping business demand rather than simply respond to it.  They saw the formation of the account team as a sort of experiment.  They did not ask permission – just went ahead and tried it.  (I’d describe this as a fairly sophisticated client in an information intensive industry, with an exceptional quality of IT leadership and management.)

This Seems to be Working – Let’s Generalize It!

I met recently with the account team and other architects, RM’s and solution managers to talk about how to generalize the model and duplicate it for the other business units and their RM’s.  We analyzed what had changed as a result of the account team approach – both from the perspective of the individual IT roles, and from the business client’s perspective.  It was an impressive story with impressive results.

So, how to ‘codify’ the approach and generalize it?  The responses from the account team members were surprising and distressing on the one hand, yet obvious and comforting on the other.  Their counsel was, “Don’t try to codify this too much.  It won’t work!”  and, “Remember, we formed into a team because we wanted to, not because we were told to!”

Not So Fast, Tonto!

The business-IT interface is an extremely complex space.  The Account Teaming approach works because it is organic, and was emergent.  It works because the team members have mutual trust and respect.  It is the role of the team that is important and brings the magic, not the roles of the team members.  They talk about “having each others backs covered.”  About the fact that the client executives know that they can talk to any of the team and reach the whole team at the same time.  About the fact that any business-IT conversation quickly and automatically gains the perspectives of enterprise architecture, solution delivery and relationship management.  The business executives don’t need to be concerned about who to call for what.  Nor do they have to sit down with five IT folk to get anything done!

The Power of Self-Organization

Ralph D. Stacey, in his great book, “The Chaos Frontier” defines Self-Organization as:

A process in which the components of a system in effect spontaneously communicate with each other and abruptly cooperate in coordinated and concerted common behavior.”

I believe that viewing organizational spaces such as the business-IT interface as a complex system, operating at the ‘edge of chaos’ (scientifically speaking) reveals the insights that:

  1. Variety, randomness, paradox, information, and interconnection are sources of creativity.
  2. Organization is a natural, spontaneous act – to force otherwise is not sustainable or effective.
  3. Systems have a capacity to self-organize to great effect – given the opportunity to do so.

The danger feared by the Account Team was that as an organizational consultant, I would take the model and create organizational charters, role descriptions, competency models, and so on, and in so doing squeeze the life out of the account team concept.  And I use the word “life” deliberately.  Everything we know about complex emergent behavior tells us that for life forms such as this type of account team to really work, they have to behave like living organisms – with porous boundaries, guided by a common sense of mission and purpose, a ‘genetic code’ if you will, not sealed off from their world by hard boundaries and deterministic rules.

Image courtesy of The Savvy CIO

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Matrix Management and the IT Organization


Many years ago, when I was a partner with Ernst & Young, John Cross, the CIO of BP (a very highly regarded company at that time) approached me wanting to benchmark the way E&Y managed its engagements.  My first reaction was incredulity.  I knew we were good at engagement management – after all, it was what we did for a living!  But it was not immediately clear why this would be of interest to BP.  John explained,

You respond to RFP’s and prospect requests virtually overnight.  You assemble a consulting team with the right mix of competencies in a day or so, and you get them on the ground at the client site, with their own consulting workbenches and tools, ready to be productive in about 48 hours.  You do all this while developing new people, managing engagement economics, running a robust quality assurance process, and keeping up with emerging technologies.  If my IT organization could do those things half as well as E&Y does them, we’d be in great shape!”

What You Can Learn From Consulting Businesses

Now I got it, and realized why John had been so successful at BP, leading the transformation of IT first at BP Exploration, and then globally across BP’s business units.  What we found through the benchmarking exercise (BP was part of a 3-year longitudinal study of global IT transformations that I was leading at the time) was that one of the trickier and more subtle aspects of the E&Y ‘magic’ was the deeply ingrained Matrix Management approach.  Individual contributors reported to both their discipline leader, and the leader of the project to which they were assigned.  Both bosses were part of regular performance reviews, with the project leader’s input carrying significant weight.  Over the course of a year, you might work on a half-dozen or more project, and work in a couple of disciplines, so you were getting performance feedback from 8 or more people.

Other Factors for Matrix Management Success

If you need the flexibility and agility that Matrix Management can bring, and the characteristics of a good consulting organization that I described above, there are several ‘conditions for success’ I’d like to point out:

  1. Clarity of Roles and Responsibilities, and “Organizational Clarity” as Patrick Lencioni refers to it in his great book, Four Obsessions of an Extraordinary Executive.
  2. A clear distinction between ‘role’ and ‘job’ – people may have one job, but fill many roles depending upon their competencies and the need at hand.
  3. A robust Performance Management System – where performance feedback is taken very seriously, performed consistently, and has a direct impact on rewards, recognition, career path and promotions.  Both the individual performer and managers must take Performance Management seriously.
  4. An organizational environment where ‘power and success’ are not denoted by one’s number of direct reports, but by one’s contributions to the success of the organization.
  5. Strong Project Managers.  A ‘project’ is the ultimate temporal unit of management – if the project management process is broken, or project managers not fully competent, Matrix Management will suffer and confusion will rein.

I am indebted (as ever!) to my colleague Roy Youngman for his contributions to this post.

Image courtesy of Global Integration

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Portfolio Management: So Much More Than a Collection of Projects!


collectionI’ve posted recently about Program Management – mainly in response to a reader’s question about how to group projects into programs.  Her question, in turn, was in response to one of my most popular posts on the distinctions between Project, Program and Portfolio Management.

IT Portfolio Management Matters!

I’m delighted that my old post on this topic (about 16 months ago) keeps attracting readers – portfolio management is one of the most important keys to business value realization from IT.  It is also often poorly implemented.  In fact, quite often, the term “portfolio management” is used without any justification in reality.

Modern Portfolio Theory

IT portfolio management is rooted in Modern Portfolio Theory.  Defined by Wikipedia, Modern Portfolio Theory:

proposes how rational investors will use diversification to optimize their portfolios…

When applied to IT, Portfolio Management proposes how the organization (assuming it is acting in a rational way towards its investments) uses diversification to optimize its IT investments.  In this case, optimization may include balancing:

  • Short term and long term investments.
  • Low risk, low return against high risk, potentially higher return initiatives.
  • Common and shared (i.e., IT infrastructure) against business unit specific investments.
  • Investments by major business process.
  • Creating new capability versus maintaining existing capability.
  • Investing in IT process and capabilities (i.e., improving the “business of IT”) versus investing in IT capability for the business.

IT portfolio management is the primary means to elevate IT decision making and investment prioritization to a business issue.

In this context, IT portfolio management implies a top down decision making framework.  It implies that:

  • Senior executives have debated, considered and reached consensus about their IT investment portfolio strategy.
  • This, in turn, implies that senior executives have considered and agreed to a business-IT strategy.
  • They have wrestled with the thorny questions about “level of optimization” of IT investments – whether this should be a business unit or function (implying a conglomerate or holding company model) or the enterprise (implying a more integrated business model.
  • If they balance by business process, that the major business processes have been defined, and their importance to business strategy execution determined.
  • They are able to monitor the gaps between their actual IT investments by portfolio category, against their target, or “model” portfolio, and can make adjustments as necessary.

Not a Collection of Projects

From time to time, I see consulting clients attempting to implement portfolio management from a collection of projects.  Sometimes, this activity includes taking a huge list of several hundred (in one recent case, nearly a thousand!) to the business so they can “prioritize the portfolio.”  This bottom-up approach is always doomed to failure.  It is often the result of several years of “order taking” behavior by the IT organization, and is, in fact, the order taking equivalent,  elevated to a different level.  It effectively says:

We’ve taken orders from you for years, and now we have this huge list of projects.  So, please take a look at them, and help us prioritize them, because we can’t do them all!”

This cannot work, and ultimately, reinforces order taking behavior, and the sense that IT does know know what it’s doing, and does not deserve the trust of its business partners.

A Question of Business-IT Maturity

I’ve written extensively about Business-IT Maturity and its relationship to business value. (For a more comprehensive treatment, use this search.)  At very low maturity, by definition, the business executives will not have the wherewithal to engage in and answer the questions exemplified in the bullet points above, so implementing portfolio management is going to be virtually impossible.  But, to get to higher maturity, these questions have to be understood, discussed and decided upon, so the IT leadership is best served educating the business till it is ready to engage meaningfully in these questions.  At that point, they will be ready for IT portfolio management.  Until then, be careful not to call bottom up collections of projects, “portfolios.”  If you do, when you are finally ready to introduce portfolio management, the language, and the business discipline it connotes, will have been polluted.

An the Link Back To Programs?

Finally, linking back to the start of this post, and the readers question, “Programs” become the most meaningful intermediary between “projects” and the “enterprise IT portfolio” – a manageable and meaningful “unit of value-producing work” that business executives can get their heads around.

Photo courtesy of the Building and Fire Research Laboratory.

Shadow IT: The Good, The Bad, and the Ugly


I’ve posted before about Shadow IT, but I want to revisit the subject – I think it’s a big issue that needs some more air.  I’ve been reminded of this lately as I work with a client with a neglected IT capability.  A new CIO has been brought in (the first sign that a hitherto neglected IT capability is now getting some attention) and he’s asked us to help him review the global IT operating model.

Among the challenges this CIO faces are a number of Shadow IT groups – small groups of people doing IT work around the company, but outside of the IT budget, governance, accountability or responsibilities of the “official, sanctioned” IT organization.  BTW, when I come across Shadow IT groups that are known/recognized, I always wonder about other Shadow IT groups that might be lurking so deep in the shadows that they are all but invisible.

Shadow IT groups are often a symptom of unmet (or poorly met) demand.  As such, they are prevalent in low business-IT maturity environments (i.e., demand appetite exceeds supply capability, so demand creates its own supply).  Paradoxically, they are also prevalent in very high business-IT maturity environments, although we would probably never refer to them as “Shadow IT.”  More likely we’d think of them as “power users,” or “embedded IT capability” and we’d encourage and celebrate such indicators of high maturity.  So, rule 1 – it’s important to know why you have Shadow IT.  If it’s a result of low maturity, I strongly believe Shadow IT needs to be integrated into the formal, sanctioned, budgeted IT operating model.  If, on the other hand, Shadow IT is a result of high maturity, then the right infrastructure for them needs to be provided, and they should be prodded and encouraged.

Why do I think Shadow IT in low maturity environments should be eliminated?  First and foremost, because they are a symptom of low maturity.  If you are going to eliminate them, you have to commit to (and act upon) improving the state of IT capabilities.  This is, of course, a good thing.  Additionally, Shadow IT groups are often unwitting impediments to improving IT capability.  If as CIO I don’t have the entire budget, then IT spend is sub-optimized.  If as CIO I don’t have control of IT standards, processes and practices, then it is that much harder for me to improve IT capability.  It’s not that some IT capability should not be embedded in the business – it absolutely should.  But exactly what to embed, when and how to embed it are important questions that need to be thought through and the IT operating model properly “designed” (at least at lower maturity levels).  Designing an IT operating model to be something akin to Swiss Cheese, where you have to design around the holes is not efficient, and is not a good basis upon which to drive an IT transformation.

Finally, there’s a “tough love” aspect to tackling Shadow IT groups.  When I was a kid growing up in London, UK, I went to a school where uniforms were de rigeur, complete with school caps!  (Long before AC/DC’s Angus Young showed us how cool they can be!)  I was caught once too often without my school cap and was sent to the Vice Headmaster’s office for a dressing down.  Fortunately for me, he was a wonderful man with a sense of humor, a Royal Airforce mustache and manner, and a vintage Rolls-Royce to boot!  He gave me one of life’s great lessons – that it was not about wearing a school cap, per se, it was about setting and living within defined boundaries, so rebellious chaps like me could push against them without doing real harm.  It’s like a parent disciplining their children – if the discipline is absent, the child will feel unloved.  (Of course, too much discipline is even worse!)  Anyway, when the CIO (with appropriate air cover from the CEO and executive team) announces that all IT will be managed under a single IT budget, and all IT-related resources report to the CIO’s organization, this sends a message to the firm – we are raising the bar on IT!  People may not like it, but they will like the fact that someone is getting serious about improving the performance of the IT function.  I’ve often seen situations where the predictions of “Oh, this will create a real stink and lots of resistance!” was far from what actually happened.  Instead, people said, “About time – please take this group back into IT – its where they belong, and where they will have the best growth and career opportunities!”

So, if you have a Shadow IT problem, don’t be a wimp!  Tackle it head on as an integral part of your IT transformation plan.  Be ready for the noise and resistance, but don’t let it derail you!